Director's Decision, W3C Patent Policy

Overview and Public Summary

Based on overwhelming support of the W3C Membership, consensus
in the Patent Policy Working Group and support from interested members of the
public, I have determined that the proposed Royalty-Free Patent Policy should
become the Patent
Policy for W3C. The Policy affirms and strengthens the basic business
model that has driven innovation on the Web from its inception. The
availability of an interoperable, unencumbered Web infrastructure provides an
expanding foundation for innovative applications, profitable commerce, and
the free flow of information and ideas on a commercial and non-commercial
basis.

Beyond establishing a commitment to royalty-free (RF) standards, the
policy provides W3C with

a stable, practical patent policy,

a clear licensing framework,

consistent disclosure obligations, and

an exception handling process when problems arise.

This policy will help W3C concentrate on the business of producing the
best possible technical standards for the Web.

Background on the Development of the Web, and the relationship to
Patents

Many participants in the original development of the Web knew that they
might have sought patents on the work they contributed to W3C, and that they
might have tried to secure exclusive access to these innovations or charge
licensing fees for their use. However, those who contributed to building the
Web in its first decade made the business decision that they, and the entire
world, would benefit most by contributing to standards that could be
implemented ubiquitously, without royalty payments.

This decision on the W3C Patent Policy coincides almost exactly with the
tenth anniversary of CERN's decision
to provide unencumbered access to the basic Web protocols and software
developed there, even before the creation of W3C. In fact, the success of
technical work at the World Wide Web Consortium depended significantly on
that decision by CERN. The decision to base the Web on royalty-free standards
from the beginning has been vital to its success until now. The open platform
of royalty-free standards enabled software companies to profit by selling new
products with powerful features, enabled e-commerce companies to profit from
services that on this foundation, and brought social benefits in the
non-commercial realm beyond simple economic valuation. By adopting this
Patent Policy with its commitment to royalty-free standards for the future,
we are laying the foundation for another decade of technical innovation,
economic growth, and social advancement.

Results of Member Review

There is strong support within the Membership and Web community-at-large
to adopt this policy. The total number of Members supporting the policy is
very high (higher than any technical Recommendation recently adopted) and
public support for the royalty-free goal of the policy has been significant.
Based on changes made to the policy in response to earlier comments, the
Advisory Committee review indicates that the overall level of support has
increased in the last year. What's more, we should be pleased that the Patent
Policy Working Group (PPWG) recommended the policy in its current form (but
for some minor changes) without formal objection from the very diverse
membership in that Working Group.

This policy discourages revenue generation strategies that work by forcing
standards-compliant applications to pay licensing fees. While the policy
necessarily involved choices that could be perceived as threatening certain
business models, I believe that this policy is the right one, from a revenue
perspective, for all who seek to contribute to the development of the Web and
who ultimately seek to profit from its growth. However, it does not preclude
licensing activity for all technologies on the Web. Indeed, by supporting the
continued growth of the underlying Web infrastructure and by growing the
overall market for the Web, this policy increases the opportunity for
financial gain (including from patent licenses) on applications that depend
upon the Web. My hope is that those Members who have expressed opposition to
the policy until now will find that it is still in their interest to
participate in the growth of the Web. We will certainly work to be sure that
this policy is implemented in a manner that is fair to all.

The policy includes a process (section 7.5.3) by which W3C may chose,
after considerable deliberation, to include technologies not available
according to the defined royalty-free terms. In order to take such a step,
substantial consensus of both those participating in developing the
technology and the W3C Membership are required. A nearly equal (small) number
of commenters object that this provision is either too limiting or too broad.
Some say that the policy must make broader accommodation for non-RF (possibly
fee-bearing) licensing. For reasons stated above, we will not take this path.
Others say that the policy ought to exclude any non-RF technologies without
exception. This exception process is only designed to be used in the rarest
cases and ought not to function as a general allowance of non-RF terms.
However, it is important to have such an exception handling process in order
to deal with the truly unexpected situation without causing the technology
development process to halt needlessly. I recognize that inclusion of this
provision was a significant compromise for many in the PPWG. Based on the
high level of support for the policy overall, and the relatively low level of
objection to this provision, I believe that the policy strikes the proper
balance.

Conclusion

The Patent Policy represents what may be the most thorough effort to date
in defining a basic patent policy for standard-setting. I thank the
participants in the PPWG for their diligent and thoughtful work in what was
necessarily a politically-contentious environment. No single group -- patent
holders, open source developers or users -- got everything it wanted. But the
Working Group believes it has found a common, workable path that will
encourage the widespread adoption of W3C standards across a wide range of
business models, from proprietary to open source. We should all thank and
congratulate those who contributed time, expertise, patience and a spirit of
cooperation to this effort.